Henry Keizer, Deputy Chair and Chief Operating Officer of KPMG LLP, U.S., spoke about “Leading in a Complex World” on March 7 in the College of Business’s Deloitte Auditorium. Keizer, who earned his bachelor’s degree in accountancy from Montclair State University in New Jersey, said this was his first visit to the University of Illinois.
“Let me say, you have one impressive institution,” he told the audience of students and faculty.
Before he began his talk, Keizer also took a moment to recognize the approaching departure of Professor Ira Solomon, head of the department and R.C. Evans Endowed Chair in Business. Keizer noted his many contributions as a teacher, researcher and his contributions to the wider world of accountancy.
“Thank you for everything you’ve done here and for the strong relationship that has been built with KPMG. We wish you all the best as you move to Tulane,” he said, as the audience applauded.
Keizer has worked his entire career for KPMG, including leading the global audit practice and leadership roles in risk management and industry market development. He noted that KPMG is the kind of firm that continually offers challenges and growth opportunities to its professionals.
Keizer told the audience that 30 years ago, when he started at KPMG the nature of complexity was different. Never mind email, Google and Facebook; fax machines did not yet exist. When someone had to send a document to a client overseas the only option was a telex, which required going to an office and finding someone who knew how to operate the machine.
“That was complexity,” he said, grinning.
Of course, today the world is not only more complex but also changes far more rapidly than three decades ago, which adds another layer of challenge. In a recent survey, Keizer said, 1400 executives identified complexity as the biggest thing on their mind, in part because of the regulatory environment, globalization, new technology and the speed of change.
“That complexity presents both tremendous opportunities but also tremendous challenges,” he said.
He urged students in the audience to examine the culture of a company they might join, which includes how they are adapting to change and other challenges. Some companies, like Blockbuster, which is filing for bankruptcy, didn’t rise to the challenge. They didn’t worry about Netflix or on-demand access to something they had in their stores. But then there are companies like Apple, which has an absolute desire to innovate, to create and maintain a loyal following, and to respond to customer demand. Company culture might make the difference between a Blockbuster experience and an Apple one.
In his experience, Keizer has observed three key attributes that help predict a company’s success or failure in this environment of growing complexity and rapid change. The three most important attributes or competencies a company should have are a focus on growth, innovation and transformation.
Keizer called revenue growth the “life blood” of a company; the way to reward people and to create funds to invest and grow more. With growing complexity, many people struggle to find solutions, which create demand for services like those offered by KPMG. Nevertheless, growth requires constantly looking at the horizon for new business opportunities. For instance, at any one time 10 percent of services in KPMG’s advisory practice become obsolete. This requires the advisory practice to constantly look on the horizon for new business trends such as the emergence of cloud computing. Keizer also said that, while the field of accountancy itself might not have enormous growth rates, tax and advisory services have the potential for “double-digit growth.”
Revenue growth is something every individual in a company should focus on and know how it is driven.
“You don’t want to be in an organization that can’t answer the question, how do you drive growth? Everyone in an organization has to focus on that,” he said.
KPMG embraces growth; it’s part of their DNA, said Keizer. Sometimes that involves acquiring from outside, sometimes it’s a matter of tapping the talent inside the company to identify new client needs and solving clients’ problems.
The second area is innovation: How do you create new products and services? For KPMG, a company that provides audit, tax and advisory services, that also means understanding how to innovate within a regulated business.
“That might mean we move slowly in some areas, but we still have the ability to innovate,” said Keizer.
The third key area, says Keizer, is transformation.
“Saying, ‘that’s the way we’ve always done it’ sounds a lot like Blockbuster,” he said.
But how, in an industry like accountancy, with a 150-year history, do you transform? His example involved the realization that clients expected auditors to become more efficient and to achieve efficiency through the use of technology. When Keizer led the global audit practice, he initiated the shift over to eAudIT, an electronic tool that KPMG uses to conduct audits. KPMG deployed the system in numerous languages to 60,000 professionals and trained them in the use of the software over the course of three years.
“It transformed how we perform audits because that’s what the market demanded,” he said.
In addition to these core competencies – driving growth, innovation and transformation – Keizer identified guideposts for leadership. The three he values the most are integrity, passion around what you do, and the ability to build relationships.
He spoke in ringing tones about integrity and the importance of keeping your word and doing what you say you will do.
“Always remember how important it is guard your integrity. Will you bend the rules? You are playing with fire. Don’t go into accounting if you are a rule bender,” he said. “You must guard your integrity.”
The second guidepost is “Like what you do.” Keizer said, in all the years he has worked, he’s never heard the alarm go off in the morning and groaned about having to go to work. Keizer urged students to have a passion for their chosen work.
The final guidepost Keizer offered the audience was the importance of relationships. When he started in accountancy, Keizer focused on the numbers and the analytical side of the field. However, he soon understood that “you cannot succeed if you don’t build strong relationships based on trust and confidence with those you work with and for. Focus on those relationships if you want to be an absolute, true leader,” he said.